Commenting on the Office of National Statistics Consumer Price Index for November 2025, Adam Deasy, Economist at PwC, says:
“Today’s drop to 3.2% takes headline CPI to its lowest level in eight months and represents the largest month-on-month fall for over a year. It’s a significantly larger fall than expected, suggesting the UK may have turned a corner into sustained disinflation.
“Food prices were the one sour note in October, and a significant risk factor given how much they can influence household’s price expectations. But in November they have led the way in pulling CPI downwards, together with alcohol and clothing, in bringing all goods inflation down to 2.1%. Services have proved more stubborn and will still be front of mind for the Bank of England.
“After keeping rates on hold in November, a few factors point to the Bank being able to cut on Thursday. The Autumn Budget included several measures that will mechanically reduce inflation going forward, such as rail fare and prescription charge freezes. Together with today’s significantly softer CPI print and an uptick in the unemployment rate on Tuesday, the pain point for the UK economy may now be weakening demand rather than higher prices. At risk of counting our turkeys before they have hatched, 2026 could mark the long-awaited return to low and stable inflation.”
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